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In 1982, Adhaminto Boone had to close down his small games company, Boone Corporation. Brian Fargo, who was vice-president of R&D, took along some of the senior programmers to found Interplay productions. The small outfit published several titles, but finally struck gold with The Bard's Tale and Wasteland, which gave them the financial backing they needed to start publishing their own titles, instead of relying on EA as their publisher.

They started publishing games from other companies in 1988, but it wasn't until 1993 that they managed another hit, and started the "Descent" series, first produced by Parallax Software. Starting in 1992, they were noted for pumping out a few Star Trek games, and in 1997 they released Fallout and MDK, followed by Baldur's Gate in 1998. Emboldened by their success, Interplay went public that same year, and changed the name to "Interplay Entertainment Corp".

The move to the stock market was a bad one, and the company reported several years of losses. The French company Titus Interactive started acquiring Interplay stock, and had by 2000 gained majority control of the company. Titus installed a new president, Herve Caen, but Fargo stayed on for a while as company chairman. However, Titus was already in financial and legal trouble at that point, and eventually had to close business in 2004. Since his installment as president, Caen had tried to shift the company's attention towards console games, an area where the company had never had much success. They missed the 2002 Christmas season, and Interplay was clearly on the road to oblivion.

On November 19, 2003, Snowblind Studios filed a lawsuit against Interplay claiming that Interplay used Snowblind engine for Fallout: Brotherhood of Steel, Baldur's Gate: Dark Alliance II, and GameCube version of Baldur's Gate: Dark Alliance without their consent and that Snowblind is entitled to royalties on the exploitation of their product. The two studios were engaged in a legal conflict between 2003 and 2004 which ended up determining that while Interplay would be allowed to work with materials already using the Snowblind engine, they would not be able to use it for any future games.

Interplay was evicted by its landlord for not paying rent on the very day that Titus quit business, and most of the remaining staff had to leave because they weren't getting paid. Herve and a few others relocated to another office, trying to get the company going again by selling off their various assets, but its various debts were simply too staggering. They licensed the rights to Fallout 3 to Bethesda Softworks.

On November 29, 2006, Interplay was served with an involuntary bankruptcy order. The following day, Interplay filed a SEC form, stating their intent to seek European funding for a Fallout MMOG project. The form notes their intent to begin development in January 2007.

In November 2006, Interplay, still headed by Herve Caen, filed a Form 8-K filing to the United States Securities and Exchange Commission (SEC) regarding a potential Fallout massively multiplayer online game.[1] In April 2007, Bethesda Softworks, the developer of Fallout 3, purchased full rights to the Fallout IP for $5.75 million USD. While Bethesda now owned the rights to the Fallout MMO IP, clauses in the purchase agreement state allowed Interplay to license the rights to the development of the MMO.[2] Specific requirements were stated in the agreement that if not met, Interplay would immediately lose and forfeit its license rights for Fallout. Development must have begun within 24 months of the date of the agreement (April 4, 2007), and Interplay must have secured $30 million within that time frame or forfeit its rights to license. Interplay would furthermore need to launch the MMOG within 4 years of the beginning of development, and pay Bethesda 12 percent of sales and subscription fees for the use of the IP.

In November 2007, Interplay reopened in-house development and hired Fallout developer Jason D. Anderson as creative director for an unannounced MMO.[3] Given the aforementioned facts, it's most likely that the game Anderson is working on is Interplay's Fallout MMO, given that he is the contact name of Interplay's jobs appliance and that Fallout is referred in the job requirements.[4]

On June 30, 2008, it was announced that Interactive Game Group (created by Frederic Chesnais, former Chief Executive Officer of Atari, which now also owns MicroProse) purchased 2,000,000 shares of Interplay stock, as consideration for entering into a game production agreement.

On April 2, 2009 Interplay announced a binding letter of intent with Masthead Studios, a Bulgarian-based developer, to fund the development of Fallout Online. Masthead and Interplay teams will work together under the direction and control of Interplay to complete development of the project.[5][6]

Interplay's current logo

In 2010, Interplay formed Interplay Discovery for the purpose of making pinball and other arcade games, to help fund Fallout Online.

On December 31, 2010 Interplay stated that they currently had a loss of over $2.8 million in deficit and over the previous financial year lost over $1 million, mostly due to the ongoing legal case between the company and Bethesda Softworks over the Fallout licensing agreement. Due to this the company announced in late March that Fallout Online maybe put on indefinite hold without sufficient funding for the project.

On April 15, 2009, it was announced that Bethesda Softworks moved to rescind the Fallout MMORPG license.[7] On September 8, 2009, Bethesda filed two lawsuits, accusing Interplay of two counts of breach of contract, trademark infringement and unfair competition. In the first lawsuit, Bethesda claims that Interplay is in breach of the Fallout MMO agreement for failure to commence full scale development by April 4, 2009 and to secure certain funding for the game. Interplay disputes these claims.

The second lawsuit concerns Interplay's continued sale of Fallout, Fallout 2, Fallout Tactics, and Fallout: Brotherhood of Steel. According to Bethesda, the licensing contract requires all advertising, packaging and other promotional material to be sent to them for approval first, which, according to the lawsuit, was never done by Interplay regarding neither the Fallout Trilogy pack, nor any of the releases through Good Old Games, Steam and other digital distribution platforms. Bethesda also claims that the name Trilogy constitutes unfair competition, since it suggests that the pack includes Bethesda's own Fallout 3.[8]

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